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MANILA, Philippines – The Chamber of Real Estate and Builders Association (CREBA) has been pushing for the allocation of P100 billion ($2.23 billion) of unused agri-agra funds for socialized housing under a unified home financing program.
CREBA National Chairrman Charlie Gorayeb said access to funding is the most crucial link to speed up the socialized housing initiatives of builders.
Under review
The proposal is part of CREBA’s appeal for the government to tap P220 billion ($4.91 billion) in funds allocated to housing by various existing laws under a Centralized Home Financing Program (CHFP).
The program is meant to address the 5.5-million housing backlog and achieve a housing target production of 500,000 units each year for the next 20 years.
The amount suggested would be pooled with other funds mandated by law to provide financing to housing, CREBA said.
CREBA would like to establish the CHFP using annual investment in bonds worth P25 billion ($557.79 million) by the Social Security System (SSS), P25 billion ($557.78 million) from the Government Service Insurance System (GSIS), and P70 billion ($1.56 billion) by the Pag-IBIG Fund as mandated by their respective corporate charters.
CHFP will allow all qualified income-earning citizens, whether members or not of the SSS, GSIS or PAG-IBIG Fund to borrow, for as long they have no outstanding government housing loan.
The funds shall then be the springboard for the operation of a long-term mortgage-backed, securitization program.
Led by a secondary mortgage institution (SMI) organized by government, the scheme shall entail the formulation and implementation of a securitization, capital, and secondary market operation to increase and sustain funds available for housing development.
Real Estate Price Index
The Bangko Sentral ng Pilipinas (BSP) is reviewing the proposal.
In his presentation at the CREBA meeting on March 26, BSP Deputy Governor Diwa Guinigundo said the BSP, the Department of Agriculture (DA), and the Department of Agrarian Reform (DAR) are conducting a legal review to clarify the use of the agri-agra credit quota for the housing sector.
The Agri-Agra Reform Credit Act of 2009 requires banks to allot 25% of total loanable funds to the agri-agra fund.
“The central bank is the custodian of agri-agra, but we are talking to banks also,” Gorayeb said.
Apart from reviewing the CREBA proposal, Guinigundo said the central bank is also pushing other efforts to improve the financing for housing in the country.
In his presentation, Guinigundo said the planned Residential Real Estate Price Index – the first-ever in-house price measure in the Philippines – is expected to be released by the first quarter of 2015. The index is a potential indicator of asset price bubbles in the housing sector.
Guinigundo added the BSP is also supporting the reforms at the National Home Mortgage Finance Corporation, among them, increasing its capitalization to acquire mortgage receivable and mandating government social security institutions to invest in the issuances of the agency.
Overall, CREBA said the country must finally set in motion a securitization mechanism that particularly targets the housing needs of low-income earners and the marginalized.
“The problematic housing situation is already bearing heavily on our people’s economic and social growth,” Gorayeb said. – Rappler.com
US$1 = P44.82
Houses image from Shutterstock
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